Why do we need a statement of the organization's purpose and mission?

Without a clear definition of both the business purpose and mission it is not possible to determine clear and realistic business objectives. There has to be a clear line of sight between the two for the business to grow. If an organization has redefined its purpose there will need to be a new mission to take it on its journey in fulfilling its purpose. Once accomplished, there will be another mission an so on.

Drucker points out in his Practice of Management that “all the great business builders had a clear theory of the business which informed all their actions and decisions”. He tells us that “unless the basic concepts upon which a business has been built are visible, clearly understood and explicitly expressed, the business enterprise is at the mercy of events”. From this we ask questions like,

Are we in the rail business or the travel business?

Are we in hotel business or the leisure business?

Are we in the phone business or the communications business?

The answers to such questions will inform all your actions and decisions because if you are in the leisure business and not the hotel business even though you run a hotel, you can see yourself providing far more than accommodation as this will be only one of your services. It also changes your perception of your customers from being merely guests booking a room to clients using health and fitness suites, a variety of restaurants, entertainment facilities, swimming pools etc